Brian Johnson with TheStockMentor.com and the markets are just consolidating in here awaiting the next bigger move. Options Expiration is rarely without some kind of decent volatility so I'm expecting a good bit of movement as we enter the rest of the week.
Slope of Hope Blog Posts
Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.
ABX+GDX Calls
We like ABX and GDX both for calls. It is basically the same trade so we would pick which one you like the best. GDX target is $67 on the current leg and ABX target would be $57. There are higher targets but these would be the levels we would look to scale out of the calls.
We had a buy signal last Thursday on both of these stocks but since then they are not up much so they are still valid here.
Short GLD and buy GDX would be a good trade here.
Happy Trading,
www.eMiniSchool.com
http://wwweminischool.wordpress.com/2011/08/16/gdx-sept-62-calls/
Ratios and Symmetry (By eMiniSchool.com)
In the last posts we were noting the symmetry levels on the support side of the market. The ES,TF, and DOW all came down and hit the symmetry support but none of them closed below the support levels. The only one that did not hit the symmetry support was the NQ (it came close).
We received emails saying we were crazy for putting out support levels as the market was falling and how "this time" the market is different so the levels do not mean anything. It seems like every time the market starts to try to make a top it is always "different" from before but in reality it is no different.
If you look at the charts above we noted the symmetry going up. We did this so you can see how the calculation has worked in the past. It is up to you if you want to follow the levels or ignore them but you will see using the calculation it would have told you where the turning points were. These turning points are part of how we get symmetry for the entire pattern.
The top chart is the last high. Going from the 09 low there was 55 bars up (55 is a important number). From that high we pulled back and from that low we went up 36 bars. Divide those and you will get 1.5262 then divide that by two (Two Waves up) and you will get .763 and you will see how the last high was at the .763
Go to the bottom chart and we broke down that first leg into two minor waves. First leg up 29 bars and the second leg up 35, divide those and you will get 1.21 and divide by two and you will get .605% and you will see how that number picked the high in April 09'.
We cannot say for sure that the symmetry support where we are now will hold forever and it is not there to tell us that but it is there to tell us if the trend is still true or if it has changed and now is false. If the up wave becomes false that is when we get a true trend reversal.
There is minor and major symmetry and the last posts on our blog are noting the major symmetry levels. If we bounce up from where we are now and then fail to take out the high and roll back over we will be breaking symmetry support and fall to the inverse of symmetry. If you go back and understand how to get the calculation you will see it picks it almost every time.
We also used this in our AAPL timing Video here: http://eminischool.blogspot.com/2011/07/aapl-timing-video.html
To get the symmetry support on the markets use this link and go back through the last couple of pages and we have noted all the markets. http://wwweminischool.wordpress.com/ ( we will update the levels again tomorrow night on the wordpress blog)
Happy Trading,
www.eMiniSchool.com
PS. If you take the first 605% and the second .763% and add them together you will get 1.368 then divide that by two you will get .684%. Take that and divide it again by two and you will get .35 which is the average symmetry support for all the markets right now.
Vix Buy Signal – Take Two (by Springheel Jack)
A Vix Buy Signal (for equities) is technically issued when the Vix drops back within the bollinger bands after closing above the upper bollinger band for at least one day. The buy signal has to be confirmed however by a lower close the following day as well. The last signal at the end of July wasn't confirmed and another has now been generated and is awaiting confirmation today. I'm doubtful about this one being confirmed as well but we'll see how that goes today:
SPX bounced very nicely yesterday at 1100 and the 38.2% fib retracement of the bull market support there. I'm expecting this to mark a short term low but not to be a major low. For that I'm looking at the 50% retracement in the 1018 area, and the two important support levels bracketing that at 1000 and 1040:
If what we have been watching in the last few days was an EW (iii) of 3 move, and it really did look like one, then there is a clear cap on any wave (iv) retracement at the obvious wave 1 low at 1258.07. I'm only an occasional EWaver so forgive my non-standard annotations:
At the major low I would expect to see some definite positive divergence on NYMO, which generally delivers this at major lows and quite a few less major lows. This positive divergence is generally delivered on a lower low, though not always:
I'm leaning short on equities today for a number of reasons. One of those is that EURUSD looks ready to retrace today after hitting declining resistance from the July high. That is within a triangle that is forming:
AUDUSD has returned to retest broken support at 1.04 as I was suggesting yesterday morning. I'm expecting a rejection there today, though I'm noting that an IHS has formed at 1.04 as a neckline. AUDUSD might go the other way and break back up:
Silver looked likely to break up when I capped the silver chart below, and has now done so. I'm expecting to see a decent bounce on silver and would regard that as bearish for equities:
On the ES 15min I'll be looking for support in the 1120 if we see retracement today and a bounce from there:
My WAG on ES for the next few days is that we will see a wave B reversal into the 1120 area today, and then a Wave C of about the same size as wave A taking ES into the strong resistance area around 1220. That's looking promising so far today.
AAPL Follow up+Futures (By eMiniSchool)
This is a follow up video from the AAPL timing high video. If AAPL closes below last weeks low we would have a bearish engulf at price and time resistance.
The market had a wild day breaking the symmetry but it is important to know that the symmetry was what we consider to be minor meaning; since the March 09 low the pullbacks have been very shallow and today we broke out of that shallow type corrective condition.
This is the first ABC from the high so it is still labeled bullish even though it feels bearish. Yes, the pattern as it goes could turn to a bearish pattern but that is still a few legs away. We say that it is the last bullish pattern that fails is what starts a new direction so we need to find a low bounce and then fail before we can say the high is in for sure.
We are coming up to the next support so we would be aware of a big reversal day coming soon if not tomorrow.
Happy Trading,
Original AAPL Video: http://eminischool.blogspot.com/2011/07/aapl-timing-video.html
July 20th 78% time resistance video: http://eminischool.blogspot.com/2011/07/fib-time-video.html
